Maine’s medical marijuana industry climbed to new heights in 2014, accounting for an estimated $60 million to $75 million in sales and generating as much as $4 million to $5 million in tax revenue for the state.

The legal marijuana industry still represents a small piece of the state’s overall revenue, but state tax collection numbers show a rapid growth in sales as more patients turned to dispensaries or caregivers to buy their medicine during the past four years.

The numbers also highlight the success of a trade that once was limited to an untaxed and unregulated black market.

And although small now, sales and tax revenues are only expected to keep climbing, especially if lawmakers further expand access or if Maine joins the small but growing number of states that have expanded legalization to recreational use.

“I don’t think there is a level of taxation in this program that is going to fix some of the problems we have,” said Rep. Adam Goode, D-Bangor, House chairman of the Legislature’s Taxation Committee. “But $4 million or $5 million certainly helps.”

Money flows into the state from the medical marijuana program in three ways: fees charged to caregivers, sales tax paid at dispensaries and sales tax paid by patients who buy directly from caregivers.

The first two categories are easily calculated. The third can only be estimated at the moment, so the Portland Press Herald used the number of registered caregivers to estimate the potential revenues from that part of the industry.

Maine Revenue Services reported that the state’s eight medical marijuana dispensaries sold $16.2 million worth of products and generated just shy of $900,000 in sales tax revenue in 2014, a 40 percent increase over the previous year and more than triple the tax revenue collected in 2012.

The eight dispensaries are effectively medical marijuana storefronts that have been licensed by the state to grow and sell cannabis to qualified patients. However, an even larger portion of the industry’s sales are made by a more loosely regulated network of folks known as caregivers – small-scale growers who are allowed to supply marijuana to as many as five patients.

The amount generated from caregiver application fees was about $1 million. That’s a big jump, too, over previous years. The number of caregivers has grown 600 percent in four years, from 238 in 2011 to 1,720 in 2014.

CALCULATING ANNUAL TAX REVENUE

Revenue from sales by caregivers can only be estimated because Maine Revenue Services does not have a separate category for medical marijuana caregivers. Instead, caregivers are registered for tax purposes in the category of drugstores, or sometimes retail sales.

The 1,720 caregivers registered with the Department of Health and Human Services, which oversees the Maine Medical Use of Marijuana Program, collectively served 4,555 patients in 2014. That’s up from 3,114 the year before.

Under state law, each patient is allowed to buy up to 5 ounces of marijuana per month. An ounce of marijuana retails for between $200 and $300, depending on the strain, putting the average at about $250. The sales tax rate on medical marijuana is the same as the tax rate on almost everything else in Maine – 5.5 percent.

So if a patient purchased the maximum amount allowed by law, he or she would pay $825 in sales taxes in a year. And if each patient maxed out and all the sales taxes were paid to the state as required, that adds up to about $3.76 million in tax revenue a year.

Of course, the number is probably not that high because it’s unlikely that every patient purchases 5 ounces a month.

Still, it’s probably fair to estimate that annual tax revenue from medical marijuana sales is somewhere in the range of $3 million to $4 million, including sales from dispensaries.

That puts total legal sales of marijuana in the range of $60 million to $75 million in 2014 – between 15,000 and 18,750 pounds.

MONEY NOT THE HIGHEST PRIORITY

The tax revenue generated is significant but still represents only a tiny fraction of Maine’s overall sales tax income. The state takes in a little more than $1 billion in sales tax each year, which represents between one-quarter and one-third of all revenue.

Colorado, the first state to legalize marijuana for recreational purposes, took in $63 million in tax revenue in 2014.

Hillary Lister, a patient and former director of the Medical Marijuana Caregivers of Maine, said she thinks Maine should do a better job tracking the amount of money coming in from medical marijuana sales, particularly on the caregiver side.

She said she doesn’t think that Maine is collecting all the tax revenue it can from medical marijuana sales because the industry is not heavily regulated.

Marietta D’Agostino, program manager for the DHHS’ Division of Licensing and Regulatory Services, said her staff’s job is to meet the needs of patients. She doesn’t think about the revenue.

But she did agree that the program has been steadily growing and that has created some oversight challenges.

“It’s still a federally illegal product, so there are going to be issues,” she said. “We’re always looking for ways to improve the integrity of the program.”

LEGISLATION WOULD BOOST INCOME

Two bills introduced by Rep. Diane Russell, D-Portland, would no doubt lead to an increase in the amount of medical marijuana that is sold – and taxed – in Maine.

One bill would eliminate the five-patient cap for caregivers, allowing them to grow an unlimited amount of marijuana for an unlimited number of patients.

The second bill would remove the language in state law that says patients must have a specific condition to be certified, and instead allow doctors to use their discretion.

Russell also has submitted a legalization bill, and two advocacy groups are pushing citizen initiatives to legalize marijuana through a statewide vote by 2016. Recreational marijuana would almost certainly be taxed at a rate higher than 5.5 percent.

Russell said she’s not proposing changes to the medical marijuana law because of the potential for increased revenue, but she also said there is no question the industry is a money-maker for the state.

Medical marijuana advocates estimate that there are more than 15,000 medical marijuana patients in Maine, and more are being certified every day.

He said the state program has improved gradually in the past few years – in part because of changes to the law and in part because of a lessening stigma.

But Sulak said the program is still limited. For him, the easiest way to improve it would be to remove the five-patient cap for caregivers and eliminate the need that a patient have a specific qualifying condition in order to be certified.

That would bring the state more money, Sulak said, but it would also make it easier for patients to get medicine.

“Right now, I don’t think the supply is quite meeting the demand,” he said.

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